Shares of Cineworld Group plc (LON: CINE) today surged 27.6% after the cinema operator got a financial lifeline in the form of a $450 million new debt facility after issuing new equity warrants.
The company also agreed to bank covenant waivers up to June 2022 and extended the maturity of its $111 million revolving credit facility from Dec. 2020 to May 2024.
Cineworld was at risk of defaulting on its revolving credit facility, and the four-year extension of its maturity provides a huge relief for the company.
Mooky Greidinger, Cineworld’s CEO, said. “The measures we are announcing today deliver over $750 million of extra liquidity to support our business,”
Adding:
“Over the long term, the operational improvements we have put in place since the start of the pandemic will further enhance Cineworld’s profitability and resilience… We look forward to resuming our operations and welcoming movie fans around the world back to the big screen for an exciting and full slate of films in 2021.”
Cineworld’s aggregate financing now stands at $4.9 billion with an average interest rate of 4.5%. The group’s lenders are allowed to appoint a board observer under the new terms, with the group agreeing to issue 153,539,786 equity warrants to the participating lenders.
Alicja Kornasiewicz, chair of Cineworld Group, said: “In light of the severe financial challenges facing the group arising from the significant disruption to the entire industry, the board is confident this additional liquidity will preserve and maximize shareholder value over the long term.”
Cineworld share price
Cineworld shares today surged 27.6% to trade at 58.82p having surged from Friday’s closing price of 46.09p.